purposes on account of which it is generallyindistinguishable from management accounting or so-called internal accounting. Wilmot has summarized thenature of cost accounting as ³the analyzing, recording,standardizing, forecasting, comparing, reporting andrecommending´ and the role of a cost accountant as ³ahistorian, news agent and prophet.´ As a historian, heshould be meticulously accurate and sedulouslyimpartial. As a news agent, he should be up to date,selective and pithy. As a prophet, he should combineknowledge and experience with foresight and courage.
Objectives of Cost Accounting
The main objectives of cost accounting can besummarized as follows:1.
etermining Selling Price
Business enterprises run on a profit-making basis. It is, thus, necessary that revenue should begreater than expenditure incurred in producinggoods and services from which the revenue is to be derived. Cost accounting provides variousinformation regarding the cost to make and sellsuch products or services.
f course, many other factors such as the condition of market, the areaof distribution, the quantity which can besupplied etc. are also given due consideration bymanagement before deciding upon the price butthe cost plays a dominating role.2.
etermining and Controlling Efficiency
Cost accounting involves a study of variousoperations used in manufacturing a product or providing a service. The study facilitatesmeasuring the efficiency of an organization as awhole or department-wise as well as devisingmeans of increasing efficiency.